Turnbull To Gas Industry: Fix Shortages Or Face Export Controls

This time he's serious.

Malcolm Turnbull is threatening to force gas companies to keep more gas in the country.

With Australia on track to become the world's largest Liquified Natural Gas exporters in the world, it may sound peculiar to hear the country is facing domestic shortages so severe the Federal Government is threatening to limit exports to shore up the local market.

Prime Minister Malcolm Turnbull is threatening to force gas companies to keep more gas in the country in an effort to keep consumer prices down after shortages on the east coast of the country were forecast to be up to 3 times worse than previously predicted.

The PM took aim at state governments for having "comprehensively failed" in developing their own gas resources, and threatened to activate laws setting export limits on gas giants and state governments if they don't bolster supply to consumers on the east coast.

"That is critical to the energy security of Australia," Turnbull said.

The PM called for another meeting with energy heads, and said the export restrictions could be imposed if companies failed to act.

"We will continue to hold that mechanism ready to go and we will ensure that it is entirely fit-for-purpose in light of these changed circumstances that is a much bigger shortage than previously advised," he said.

Reports from the Australian Energy Market Operator (AEMO) and the Australian Competition And Consumer Commission warn the chances of a gas shortfall next year are much higher than expected.

It's not the first time the Government has threatened to initiate export controls -- called the Australian Domestic Gas Security Mechanism -- to secure domestic supply.

East coast gas companies met with Turnbull and the Energy Minister Josh Frydenberg on March 15 and April 19 to find solutions to a shortage of domestic gas supplies which had been driving up prices.

"Gas companies are aware they operate with a social licence from the Australian people. They cannot expect to maintain that licence if Australians are short-changed because of excessive exports," Turnbull said at the time.

The Victorian Government blamed their federal counterparts and defended the Andrews Government's ban on fracking.

Victoria's Resources Minister Wade Noonan said the state's ban on fracking is supported by every political party.

"Our agricultural sector is very important to the Victorian economy and simply attacking the states such as Victoria is not showing any leadership on Malcolm Turnbull's behalf," he told ABC Radio on Tuesday.